One of the most commonly stated inaccuracies regarding the Reagan years is the idea that during his time, the Republicans destroyed the economy by running huge deficits due to tax cuts and rampant government spending, whereas in the Clinton years, there was more fiscal responsibility. A couple quotes below help clear up this falsehood.
On Clinton’s reduction in the federal workforce:
It’s true the federal civilian workforce has been reduced by nearly 400,000 since Gore took office, according to the federal Office of Personnel Management. But 71 percent of the reduction — nearly 284,000 positions — came from downsizing the Pentagon after the Cold War, not from “Reinventing Government.”
http://www.cnn.com/2000/ALLPOLITICS/stories/10/18/debate.fact.check/
[Thank Reagan for ending the cold war and giving Clinton the (unjustified) confidence to downsize the Pentagon.]
On Reagan’s increase in the deficit:
Real federal revenues grew at a faster pace after the Reagan tax cuts than after the Bush and Clinton tax hikes. From 1982 to 1989, they expanded by 24.1 percent. Over a comparable seven-year period, 1990-97, a period that accounts for both the Bush and the Clinton tax increases, real federal revenues will have grown by 19.3 percent (see Table 5). The lesson of the 1980s and 1990s is consistent with the supply-side theory that there are behavioral and investment responses to changes in tax rates.
As a share of GDP, federal revenues fell from 20.2 percent in 1981 (the peak year for taxes as a share of GDP in the post-World War II period) to a low of 18.0 percent of GDP in 1984, and rose back up to 19.2 percent by 1989. This would suggest that the Reagan tax cuts were a small contributing factor to the increase in the budget deficit over the course of the 1980s. From 1950 to 1995, federal receipts have averaged 18.4 percent of GDP. Hence, throughout most of the Reagan years and clearly by the end, taxes as a share of national output were substantially above the postwar average.
If the Reagan tax cut was not the major contributing factor to the increasing deficit in the 1980s, what was? There were two primary explanations: (1) a large and sustained defense build-up; and (2) the unexpected rapid decline in inflation and the recession in the early 1980s.
The cumulative increase in defense spending from 1981 to 1989 ($806 billion) was larger than the entire cumulative increase in the budget deficit ($779 billion) in those years. That is, if defense spending had been held to the rate of inflation from 1981 to 1989, the total real deficit would have fallen in the 1980s rather than risen. It is also true that the decline in the military budget accounts for almost the entire fall in the deficit from 1988 to 1996.
http://www.cato.org/pubs/pas/pa-261.html
[Reagan increases defense spending and we prevail over our enemy of a half century. Clinton lowers defense spending and a new enemy attacks us as we’ve never been attacked. ]